TOKYO—
Marubeni Corp.
MARUY 0.89%
on Monday cut its net profit projection in half for the current fiscal year as falling prices of crude oil and other commodities forced the company to book steep impairment losses.

The major Japanese trading house cited a ¥95 billion ($1.24 billion) write-down in oil and gas assets as weighing on its profits. Of that amount, the sharp fall in crude prices and higher development costs in the North Sea oil and gas field prompted the company to record a ¥60 billion impairment loss.

While cheap oil is generally beneficial to Japan’s export-driven economy, Marubeni’s new profit projection is one of the first signs of the impact that lower crude prices are having on domestic trading houses.

Mitsui
& Co. and
Mitsubishi Corp.
have posted huge profits from their natural resources businesses in recent years. In a bid to catch up with their bigger rivals, Marubeni and
Sumitomo
have increased their investments in natural resources-related assets but have seen some of their investments turn sour.

Crude prices fell by roughly 50% in the second half of 2014 and have continued their decline in January. On Monday, crude-oil futures fell in Asian trade with the U.S. oil benchmark dropping to its lowest level in more than 5 1/2 years.

Marubeni also said it would book a separate ¥50 billion write-down in goodwill on Gavilon Holdings LLC, a major U.S. grain company that the company bought in 2013. Marubeni said the Omaha-headquartered firm’s performance for the current fiscal year is expected to fall short of its initial business plan, as was the case in the previous fiscal year.

Agricultural commodity prices have been falling in recent years mainly because of oversupply amid slower than expected economic growth in China. Prices of soybeans, wheat and corn have fallen to levels less than half of highs seen in late 2012 to early 2013.

As a result, Marubeni now expects a net profit of ¥110 billion for the business year ending in March versus the ¥220 billion it initially projected in May. The company said it would keep its dividend at ¥13 per share.

Back in November, Marubeni said it would book a ¥19 billion special loss because of a write down on a coal mine in Canada. Two months before that, another trading house Sumitomo Corp. announced a ¥270 billion write down due to failed investments in oil, gas, coal and iron ore assets.

Taking responsibility for the forecast cut, Marubeni president Fumiya Kokubu and chairman
Teruo Asada
will each take a 50% pay cut in February and March, a company spokesman said.